Actions of Palantir Technologies(NASDAQ: PLTR) they have lost nearly 34% of their value since hitting a 52-week high in early November. However, the stock bounced back after the company released its fourth-quarter results on February 2, rising nearly 7% in the following session.
It’s worth noting that Palantir’s expensive valuation has contributed to the stock’s decline in recent months. However, the excellent results it has delivered and the guidance management has provided make it clear that there is more to the company than just its high valuation.
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It won’t be surprising to see stocks go on a more extended ride after the Q4 report. In fact, a closer look at how Palantir is capitalizing on the fast-growing artificial intelligence (AI) software market suggests the stock could deliver healthy gains over the next five years.
Let’s look at the reasons why this tech stock is built for multiple advantages.
Image source: Getty Images.
Palantir’s fourth-quarter revenue rose 70% year-over-year to $1.4 billion. Importantly, the company’s growth has accelerated significantly in each quarter through 2025, driven by increasing adoption of its AI tools that help customers increase productivity.
Backed by the prowess of its AI platform, Palantir not only attracted new customers, but also won more business from existing accounts. The company claims that new customers deploying its AI software solutions for specific uses eventually opt for enterprise-wide deployment to leverage the benefits of AI. Management cited several examples of this trend on its most recent earnings conference call.
Palantir winning more business from its established customers over time also boosts its margins. Adjusted operating margin rose an impressive 12 percentage points year-over-year in Q4 2025 to 57%. As a result of all this, Palantir has seen remarkable growth throughout 2025.
Period
Income
Growth (YY)
Earnings per share
Growth (YY)
Q1 2025
884 million dollars
39%
$0.13
62.5%
Q2 2025
1.004 billion dollars
48%
$0.16
78%
Q3 2025
1.181 billion dollars
63%
$0.21
110%
Q4 2025
1.407 billion dollars
70%
$0.25
79%
Data source: Palantir Technologies. YOY = year over year.
The good news for investors is that Palantir expects its remarkable growth to continue. The company has projected revenue of nearly $7.2 billion for 2026, which would be a 61% jump from last year. However, Palantir could easily beat that estimate.
The company ended 2025 with a 105% increase in remaining deal value to $11.2 billion. That measure is for the total value of contracts the company has signed but not yet fulfilled, and in this case, it’s much higher than management’s 2026 revenue forecast.
Moreover, the customers Palantir has added in recent quarters could further inflate the value of the remaining deal. At the end of Q4, the total number of customers increased by 34% year-over-year to 954. There is a chance that the company’s revenue stream will improve during the year, as these 243 new customers could expand the adoption of its AI software platform.
That could pave the way for stronger-than-expected growth in both revenue and earnings. Another important point to note is that while analysts have raised their growth expectations for Palantir over the next three years, their targets appear conservative.
PLTR Revenue Estimates for Current Fiscal Year Data by YCharts.
I say this because, according to a forecast by researchers at MarketsandMarkets, between 2025 and 2030, the market for AI software platforms will grow by more than 400%. According to company estimates, the market for AI software platforms generated just over $18 billion in revenue last year. If accurate, Palantir’s $4.48 billion in revenue means it controlled about a quarter of this fast-growing space.
Even better, the 2026 forecast indicates that Palantir is poised to exceed the 39% annual growth rate that the AI software platform market is expected to see over the next five years. If he can achieve and maintain this level of performance, he could become a much bigger player in this lucrative niche.
The points discussed above suggest that Palantir can significantly beat Wall Street’s growth expectations through 2030. That’s probably why analysts expect a slight acceleration in its revenue growth to 40% in 2028, compared to 38% in 2027.
But as the company gains a larger share of the AI software platform space, it won’t be surprising to see its top line grow at a rate of 50% over the long term. If this is indeed the case, Palantir’s revenue could grow to nearly $37 billion in 2030 (using projected 2026 revenue as a baseline).
Assuming Palantir’s stock even trades at 20 times sales at that time, based on that figure, its market cap would be $740 billion — 128% higher than it is today. So Palantir could surpass $300 by 2030 from its current share price of just under $140.
The sales multiple assumed above is a massive discount from Palantir’s current price-to-sales ratio of 78, meaning this AI stock could deliver robust long-term gains even if its valuation falls significantly.
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Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.
Prediction: This will be Palantir Technologies’ stock price in 2030 was originally published by The Motley Fool
